Staff Reporter

High Court asks Government to state formalities

Kochi: A Division Bench of the Kerala High Court on Friday adjourned to March 14 the hearing on a writ petition filed against the agreement signed by the Union and the State Governments for loan with the Asian Development Bank (ADB).

When the petition came up before it, the Bench of Acting Chief Justice K.S. Radhakrishnan and Justice M.N. Krishnan orally asked the government pleader to state the formalities complied for taking the loan. The petition was filed by the Anti-ADB Loan Committee and two others.

When the court orally asked whether a policy decision taken by the Government could be challenged, Sivan Madathil, counsel for the petitioners, submitted that if the Government took a decision contrary to the constitutional principles and without complying with the statutory procedure, such a decision could be questioned before the court. Besides, the policy decision should be placed in the Assembly before it becomes final. Policy decisions such as signing of the agreement should have been placed before the Assembly and deliberated upon. The counsel also submitted that there was no approval of the Cabinet for signing the agreement.

The petitioners sought to declare that the loan agreement signed between the Central Government and the ADB on December 8, 2006 was illegal and was without complying with the legal formalities. The petitioners also pleaded for a declaration that the agreement entered into between the State Government and the ADB was illegal.

The petitioners pointed out that the signing of the agreement by the Central Government as a borrower and the State Government as the project executor was highly "prejudicial to the interest of the general public." As per the agreement, the Government received the loan on behalf of the municipal Corporations in the State. The Government could not enter into an agreement without the consent and knowledge of the local self-governments since the Corporations were local self-government institutions by virtue of the 74th Constitutional amendment. By signing the agreement, the Government had encroached on the powers of the local bodies. The petitioner alleged that the paramount responsibility of the cabinet system of government was not exercised by either Finance Minister T.M. Thomas Isaac or Local Self-Government Minister Paloli Mohammed Kutty. The Ministers were legally duty-bound to place the whole issue pertaining to the loan agreement before the Assembly. The entire deal had resulted in compromise of public interest.